Revenue from operations = 4,00,000,  Average Inventory = 55,000 Gross Profit Ratio = 10%. Calculate inventory turnover ratio-

6.55 Times

The correct answer is Option (3) → 6.55 Times  

• Revenue from Operations = ₹4,00,000

• Average Inventory = ₹55,000

• Gross Profit Ratio = 10%

Gross Profit Ratio= [Gross Profit/ Revenue from Operations] * 100 

Gross Profit=10% of 4,00,000=40,000

COGS=4,00,000−40,000=3,60,000

Inventory Turnover Ratio    = COGS/ ​Average Inventory 

                                              = 3,60,000/55,000 = $$6.55\text{ Times}$$